Overview of Class Action Lawsuit Against Tether and Bitfinex
Plaintiffs in an ongoing class action lawsuit against Tether and Bitfinex have filed a new, slimmed-down complaint accusing the crypto companies of manipulating the crypto markets and violating antitrust laws. The complaint, filed in the Southern District of New York (SDNY), alleges that Tether and Bitfinex engaged in a scheme to inflate cryptocurrency prices by introducing Tether’s USDT stablecoin without adequate backing, creating artificial demand for cryptocurrencies.
The lawsuit, overseen by U.S. District Judge Katherine Polk Failla, is the third iteration of the case, with previous complaints being filed in 2019 and 2020. The latest complaint includes causes of action related to market manipulation, monopolization, and violations of the Sherman Antitrust Act.
Allegations Against Tether and Bitfinex
The plaintiffs’ complaint contains chat and deposition logs from the companies’ operators, purportedly admitting to manipulative actions. For instance, Tether’s CFO Giancarlo Devasini reportedly acknowledged the issuance of an unbacked credit line could lead to increased Bitcoin purchases and price appreciation.
Despite the allegations, a spokesperson for Tether has dismissed the claims as baseless, asserting confidence in prevailing in the litigation. The lead plaintiffs in the case are U.S.-based crypto traders, joined by other civil class action suits and plaintiffs.
Legal Developments and Responses
The lawsuit has faced challenges, including changes in plaintiffs’ counsel and opposition from Tether and Bitfinex regarding the amendment of the complaint. However, Judge Failla granted the motion for a second amended complaint to proceed.
Attorneys for the plaintiffs have not commented on the latest developments. The case continues to attract attention due to its implications for market integrity and the regulatory oversight of cryptocurrencies.